Strongest Weekly Gain for Gold in 2023
Gold prices climbed 1% on Friday, marking the metal’s best week of 2023. Geopolitical tensions and growing speculation about U.S. Federal Reserve rate cuts fueled the surge. Spot gold hit $2,696.76 per ounce at 08:00 GMT, reflecting a 5% weekly gain—its strongest since early October. U.S. gold futures rose 0.9%, reaching $2,699.30.
Soni Kumari, ANZ commodity strategist, highlighted key drivers of the increase. She pointed to Ukraine’s recent attacks on Russian infrastructure and dovish remarks from Federal Reserve officials as major contributors. Ukraine’s military confirmed that drone strikes targeted Russian military sites, including oil refineries and radar stations, further escalating geopolitical risks.
Fed Rate Speculation Boosts Gold’s Appeal
Economic uncertainties and potential Federal Reserve rate cuts have enhanced gold’s status as a safe-haven asset. On Thursday, the Chicago Federal Reserve President reiterated his support for future rate cuts. His comments fueled market expectations that the Fed may slow its pace of tightening in coming months.
Currently, the CME Fedwatch Tool indicates a 59.4% chance of a 25-basis-point rate cut at the Fed’s December meeting. Market sentiment suggests that if the Fed pauses or delays a December rate cut, it could trigger a pullback in gold prices, according to Kumari.
Investors are preparing for key U.S. economic data releases next week. Reports on consumer sentiment, GDP, and core PCE inflation are expected to offer insight into the Fed’s future rate decisions. Nicholas Frappell, head of institutional markets at ABC Refinery, forecasts that gold prices will target a range of $2,690 to $2,715 based on current market trends.
Broader Precious Metals Rally
Other precious metals also posted strong gains on Friday. Spot silver increased by 1.7%, reaching $31.31 per ounce. Platinum climbed 0.9% to $969.35, while palladium rose 1.3% to $1,042.50. All three metals are set to close the week with significant gains, reflecting broader optimism in the precious metals market.
